Follow the Money by Investing Alongside the Wealthy

Author: USGI
Date Posted: January 17, 2014 Read time: 3 min

For investors looking for a lucrative approach for their money this year, take a cue from Citi’s advice to its wealthy clients.

CNBC recently highlighted Citi Private Bank’s new report, saying investors are “hurting their long-term returns by focusing too much on assets that can be cashed in at virtually any moment.”

We agree with this sentiment that investors are overly concerned with liquidity. Warren Buffett once wrote to shareholders that his “favorite holding period is forever.” While forever may not be appropriate for everyone, a multi-year investment timeframe and annual rebalancing are essential to building wealth, especially when investing in volatile asset classes such as emerging markets, resources and gold. Even though these asset classes typically have higher volatility, they historically have performed spectacularly.

Citi’s “Outlook 2014” is a significant change compared to the view it gave last year, as the firm tells its wealthy clients:

We have seen both equities and many fixed income markets rise in tandem regardless of economic fundamentals and modest growth expectations. Investors, however, have not participated broadly in those market developments, and, despite a rise of over 20 percent in the value of global equity markets during 2013 (following a 13 percent rise in 2012), portfolios still remain poorly allocated, underweight in equities, overweight in cash and carrying a significant amount of interest rate risk.

The new year is a great time to look at your portfolio to see if Citi would deem your investments “poorly allocated.” I suggest investors go with the momentum of the market and apply an approach similar to the one taken by the Holmes Macro Trends Fund. In 2013, the fund outperformed its benchmark S&P Composite 1500 Index by nearly 7 percent. See its performance history here.

One way U.S. Global Investors can help investors with appropriate allocation is through the ABC Investment Plan. It’s an automatic plan that uses the advantages of dollar-cost averaging, which allows you to invest a fixed amount in a fund at regular intervals, together with financial discipline to help you work towards your financial goals.

No matter how you achieve these goals, it’s important to follow the money. If Citi’s advice is valuable for its wealth clients, it’s good advice for all investors.


See CNBC’s article here.


Please consider carefully a fund’s investment objectives, risks, charges and expenses.   For this and other important information, obtain a fund prospectus by visiting or by calling 1-800-US-FUNDS (1-800-873-8637).   Read it carefully before investing.  Distributed by U.S. Global Brokerage, Inc.

Past performance does not guarantee future results.

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. By clicking the links above, you will be directed to third-party websites. U.S. Global Investors does not endorse all information supplied by these websites and is not responsible for their content. The S&P 1500 Composite is a broad-based capitalization-weighted index of 1500 U.S. companies and is comprised of the S&P 400, S&P 500, and the S&P 600.

A program of regular investing doesn’t assure a profit or protect against loss in a declining market. You should evaluate your ability to continue in such a program in view of the possibility that you may have to redeem fund shares in periods of declining share prices as well as in periods of rising prices.